For Boeing, Record Crash And Record Sales For `85

SEATTLE — It was the best of times and worst of times for the Boeing Co. in 1985 -- a year of soaring sales and tragic crashes.

Never in the history of civil aviation have so many people died in plane crashes in one year -- more than 2,000 in all.

The deadliest of the 1985 crashes involved a Boeing 747 that crashed into the side of a mountain in Japan under circumstances suggesting a problem with the jumbo jet`s tail section.

But even as the death toll rose, Boeing -- the world`s dominant manufacturer of commercial aircraft -- was setting a company sales record. Against the deadly drumbeat of fatal airplane crashes, Boeing was able to trumpet the receipt of one big order after another.

But it was more than just big crashes and big sales in 1985 for Boeing. There was the acquisition of one company and a near-miss on another. New company leadership emerged. And Boeing received some less than favorable attention over some of its defense-related business.

Among the events that kept the Boeing in the headlines:

Boeing set a company record for new airplane orders, $12.44 billion worth. That`s more than twice as much as a year ago. Included were two of the three largest orders in the company`s history -- a $3.1 billion deal with United Airlines in November and a $2 billion order from Northwest in October.

The crashes: In the worst year in commercial aviation history, six major plane disasters involved Boeing aircraft, including the crash of the Japan Air Lines 747 in August that killed 520 people. It was the most deadly air disaster in history involving a single plane.

As one of the nation`s largest defense contractors, Boeing caught some of the flak aimed at the Pentagon`s business partners in 1985. Specifically, Boeing was criticized for selling a pair of pliers to the Defense Department for $748 and for charging some of its political contributions to the Pentagon.

The bidding for Hughes Aircraft: After 25 years without making any acquisitions, Boeing went after a big one by joining General Motors and Ford in pursuit of Hughes. GM won the bidding by offering $5 billion for Hughes.

The de Havilland purchase: Although Boeing didn`t get Hughes, it agree in November to buy another company -- de Havilland Aircraft of Canada.

New models: Boeing moved to expand its product line at both the top and the bottom in 1985. The company officially launched a new model of its jumbo jet -- the 747-400 -- which will be the longest-range airliner in the world. By agreeing to buy de Havilland, Boeing will enter the growing market for small commuter aircraft.

Changes in the executive suite: Early in the year, Boeing moved to put its next generation of leadership in place by promoting Frank Shrontz, 54, to president of the corporation and naming Dean Thornton, 56, president of the company`s commercial airplane division.

But more than just keeping Boeing`s name in the headlines, the rush of events in 1985 also raised the question of whether there was some fundamental shift in the company`s fortunes.

That Boeing concluded its two biggest deals late in the year, after most of the air fatalities had already occurred, indicates that the wounds to the company from the crashes weren`t deep.

But there are other questions: Is Boeing making any profit on all of the planes it is selling? Has the company changed its philosophy on acquisitions? Is it re-orienting itself more toward defense business?

The conventional wisdom among Boeing officials and financial analysts is that Boeing has emerged relatively unscathed from the spate of crashes because there has never been any indication of a design flaw in any of its aircraft.

``Airlines look more at that than anything else,`` Shrontz said.

The facts are these: Of the 20 fatal crashes involving civil airliners in 1985, six were Boeing planes -- two 727s, two 737s and two 747s. Nearly 1,100 people were killed in those six crashes.

Of the six Boeing plane crashes, only in the case of the JAL 747 is it believed that defects in the plane`s structure were responsible.

Although the cause of the JAL crash is still officially under investigation, preliminary evidence suggests the problems began when a rear bulkhead ruptured and allowed pressurized air to escape into the tail section.

Since the investigation began, Boeing has acknowledged making an improper repair on the bulkhead after a rough landing in 1978. Without admitting that was the cause of the crash, Boeing agreed to split compensation payments to the families of the victims with JAL.

Since the crash, both Boeing and the National Transportation Safety Board have recommended changes in the 747 tail section to limit damage to the tail from a such a depressurization. But, unlike 1979 when the McDonnel Douglas Corp.`s DC-10 jumbo jet was grounded for 38 days, the 747 continues to fly.

``It would be naive to say that an accident like JAL had no impact whatsoever on passengers or the investment community or customer attitudes,`` said Shrontz.